Gwen McDonald can remember seeing layoffs at a high-tech company in the 1970s and knowing that if she were ever forced to cut her own staff one day, she would not make the same mistakes.
“They called your name to the cafeteria over the PA system and you knew when your name was called that you were getting laid off,” the senior vice-president of corporate services at 3Com Corp. in Santa Clara, Calif. said. “The shear humiliation of being herded like sheep into the cafeteria and having the entire company know – they were clearly not treated with dignity.”
New research shows that smart managers at technology companies no longer take that approach to layoffs. However, the new-found respect for departing employees is more about financial forward-thinking than about avoiding hurt feelings.
A survey by Drake Beam Morin Canada Inc. shows that technology employers are starting to see it is a good idea to gear the layoff process towards the needs of the displaced employee. Why? Because you never know when you will need them again.
“If I look at organizations that are displacing employees in today’s marketplace, one of the things they are doing is gearing their severance packages to be extremely fair and competitive. There is a strong capability and need looking forward that there is going to be an opportunity to re-recruit those individuals,” Richard Eaton, vice-president of the Ottawa office at Drake Beam Morin Canada Inc. said. “We want the individuals who are leaving because of business conditions or market conditions not to leave with a bitter taste in their mouth.”
He continued that it is more productive and economical to hire back old employees because the employer already knows they fit in the office atmosphere and won’t need as much training.
“We want them to look at it and think they have been fairly treated within the organization, because it isn’t ‘if’ we are going to need them, it’s ‘when’ we are going to need them,” he said. “Months down the road, as the economy returns and the demand for technology and telecommunications grows, there will be a need to re-recruit those people, and who better to have than someone who has already shown that they are a very productive worker in your organization?”
Drake Beam Morin surveyed more than 3,000 Canadians who were laid off, more than three quarters of whom lost jobs because of company downsizing or mergers and more than 90 per cent of whom found work again within six months. Of the 60 per cent of workers who were laid off in the technology industry, only 42 per cent found work in that field.
“It’s a different marketplace right now,” he said.
According to Lucille Peszat, a doctor at the Stress Management Centre in Toronto, employers should be sensitive to returning employees. They have, after all, been burned once by the company.
“We see people go back and they are cautious and anxious…they went through it once and are aware it could happen again,” Peszat said. “Others go back and are happy. It varies and it depends on the company and on the individual and how they perceived the situation where they were let go.”
She said the best way to deal with the situation would be to have the manager immediately talk about the layoff and welcome the employee back.
“They should let them know it wasn’t something they wanted to do, but had to because of circumstances,” she said. “But, to be honest, very few managers do that. Most times, everyone tries to avoid talking about it. That can be OK, but obviously, the ideal thing is to have an open, trusting relationship.”
3Com’s McDonald learned her lesson through that experience in the 1970s and, admitting that her company has seen its share of hard times and had layoffs as a result, is nonetheless proud of the company’s layoff policies.
“The first thing we do is communicate and talk about what the overall strategy is,” she said. “The employees understand the reasons and the impact.”
Eaton said if an employee does have a successful transition back into the company they once left, they are at a definite advantage.
“There is a history with the employer and knowledge of their skills and capabilities and fit within the organization,” he said. “The employee is in a very advantageous situation.”